2017 (2) TMI 305 - AT - Central Excise

Denial of CENVAT credit - fake CENVAT invoices - Held that - Rule 13 of CCR, 2002 deals with various situations and one of the situation covered by the said Rules is that, If a person contravenes any of the provision of said CCR, 2002 in respect of any inputs, then such person shall be liable to penalty not exceeding the duty on the excisable goods in respect of which any contravention has been committed . The appellants have issued invoices without payment of duty and issue of invoice without payment of duty is contravention of provision of Cenvat Credit Rules. The penalty u/r 13 of CCR is not dealt with in any of the case laws relied upon by the appellants - appellants were liable to be imposed with penalty. Appeal dismissed - decided against appellant.

Summary

Issues:
- Allegations of issuing fake Central Excise invoices
- Liability for penalty under Rule 26 of Central Excise Rules, 2001/2002
- Applicability of Rule 13 of Cenvat Credit Rules, 2002 and Rule 15 of Cenvat Credit Rules, 2004

Analysis:
The case involved three appeals arising from a common Order-in-Original dated 27.08.2008. The allegations were that the appellants issued fake Central Excise invoices to a company without payment of duty. The appellants were accused of contravening Rule 13 of Cenvat Credit Rules, 2002, Rule 15 of Cenvat Credit Rules, 2004, and Rule 26 of Central Excise Rules, 2001/2002. The appellants contested the penalty under Rule 26, arguing they were not involved with goods liable for confiscation. They also contended that Rule 13 and Rule 15 apply to those availing Cenvat credit in contravention of the rules.

During the hearing, the appellants cited various case laws to support their arguments, emphasizing the applicability of Rule 26 of Central Excise Rules and Section 112 of Customs Act, 1962. The Tribunal considered Rule 13 of Cenvat Credit Rules, 2002, which imposes penalties for contraventions. It was noted that issuing invoices without payment of duty contravenes the rules, making the appellants liable for penalties under Rule 13. The Tribunal found no grounds to interfere with the Order-in-Original and dismissed all three appeals.

In conclusion, the Tribunal upheld the penalties imposed under Rule 13 of Cenvat Credit Rules, 2002, based on the contravention of issuing invoices without payment of duty. The case laws cited by the appellants did not address the specific penalty provision, leading to the dismissal of the appeals. The decision highlighted the importance of complying with Cenvat Credit Rules to avoid penalties and emphasized the liability for contraventions, even in cases involving fake invoices.